Barratt earnings lift 12% on rising house prices, margins
The UK’s largest housebuilder, Barratt Developments, pushed up pre-tax profits by 12 per cent in the year to June, boosted by rising house prices and growing margins.Pre-tax profit at the FTSE 100 group reached £765m on revenues of £4.56bn, up 9.8 per cent from the year before.
That was aided by an 8 per cent rise in average selling prices for Barratt’s private homes to £313,000 during the year.However, the group’s housebuilding volumes were almost flat, rising 0.4 per cent to 17,395 during the year – its highest figure in nine years – with a prediction of “modest” growth in the coming year.In common with other housebuilders, Barratt has delivered strong rises in housebuilding volumes over the past three years but increases are now levelling off, despite government pressure to ramp up build rates.Barratt is proposing a final dividend of 17.1p a share, up 39 per cent from a year earlier, plus a special dividend of 17.3p a share, both to be paid in November; this would bring the total dividend payouts for the full year to 41.7p a share, an increase of 36 per cent.John Allan, chairman, said:Market conditions remain good with a wide availability of attractive mortgage finance, which, alongside Help to Buy, continues to support robust consumer demand.
The group is in a strong position, with a substantial year end net cash balance, healthy forward sales position and an experienced management team. Consequently, we remain confident in the strong fundamentals of the housing sector and our business.Help to Buy, a government equity loan scheme enabling buyers to purchase with deposits of only 5 per cent, currently supports about a third of housebuilders’ sales.
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